By: Josh Slocum, McClellan Wealth Management
It should come as no surprise that fairness and equity usually aren’t words used in the divorce process. But the fact is, these decisions will have a long-term impact on your life and the lives of your family members.
While emotions are likely running high at this point, it’s not exactly easy to make rational decisions. That’s why it’s so important to remember that you have options when it comes to discussing financial assets and other matters such as child custody.
Ultimately, couples will need to decide which process, divorce mediation or litigation, is the right path for them.
Choose wisely.
Mediation vs Litigation: What’s the difference?
In the litigation process, each party is represented by their own attorney, and therefore, each must pay attorney fees.
In mediation, spouses meet with a neutral third party mediator, and typically, their fees are going to be a good bit less than an attorneys.
The Pro: If you and your spouse choose mediation over litigation, firstly, you’ll likely save money.
The Con: One important distinction is that mediators are not attorneys and cannot provide legal or financial advice – they can only provide information.
If both parties already have a good understanding of household finances and debts, mediation may be the way to go to save everyone stress and money during the divorce process.
Mediation can also help you and your spouse reach agreements on child custody, child support, alimony, property division and more.
The Benefits of Mediation over Litigation
- Creativity. Mediation can allow for creativity and may result in more equity and fairness among the parties. In litigation, judges are there to follow and interpret the law by the book. But mediators are free to create “out-of-the-box” settlements best for all parties.
- Lower risks. One of the biggest benefits about mediation is that it is essentially risk-free. Parties are not obligated or pressured into signing the agreements and outcomes the mediator develops. Each party can also have their part of the agreement reviewed by an independent third party at any time.
- Resources. Other options and advice are still available. At any time, you can choose to consult an attorney.
- Control. Judges and attorneys do not control the situation – you, your spouse and the mediator do.
- Flexibility. Online mediation may be available. This can move the process along quicker than trying to match schedules to meet in person.
- Confidentiality. What goes on in mediation is not part of a public record.
- Successful settlement. Most mediations, nearly 90% according to statistics, end in a successful settlement for all parties.
- Again, cost. Mediation is often less expensive than a trial.
When Litigation May Be the Right Choice
Of course, mediation may not be the best choice for everyone.
When each party is nowhere near an agreement on important issues, mediation simply may not work. Also, if domestic violence, abuse or control issues are taking place, then mediation could result in a traumatic experience that could and should have been avoided.
In these instances, litigation may very well be the best option.
Mediation – for When a Fair Split is the Goal
If both parties approach mediation with openness and a willingness to compromise, mediation can be successful and result in a fair outcome for all parties. Successful mediation also potentially makes the rest of the divorce process easier- and faster.
Because all of the financial details have already been decided, you can file an “uncontested divorce.” Uncontested divorces are usually less expensive and move faster than divorces that move on to litigation in court. Mediation may be the key to helping all parties move on to the next phases of their lives.
Contact McClellan Wealth Management for Financial Advice During Divorce
McClellan Wealth Management is here to help throughout all steps of divorce financial planning. Whether you’re in the beginning stages of divorce or well into the process, simply having a financial planner to consult may take a small amount of stress off your plate.
Give us a call at 205.208.9868 or visit us online today. We’re here and ready to help.
This material is provided as a courtesy and for educational purposes only and is not intended to be relied upon as specific investment advice and is not a recommendation, offer or solicitation to buy or sell any security. Investing involves risk including loss of principal. Before investing or using any strategy, individuals should consult with their tax, legal, or financial advisor. The opinions expressed here are those of the author and not Advisor Services Network, LLC.